Recent research in decision making reported a description–experience (DE) gap: opposite risky choices when decisions are made from descriptions (gambles in which probability distributions and outcomes are explicitly stated) and when decisions are made from experience (the knowledge of the gambles is obtained by sampling outcomes from unknown probability distributions before making a choice). Th...

Ambiguity aversion, or the preference for options with known rather than unknown probabilities, is a robust finding within the decision making literature (see Camerer & Weber, 1992, for a review). There are some suggestions this averseness is due differences in the inferred prior distribution (Güney & Newell, 2015). In this study we investigated the relationship between prior distributions and ...

OBJECTIVE The aim of this study was to investigate the relationship between the attentional coping styles (monitoring and blunting) of rheumatoid arthritis (RA) and osteoarthritis (OA) patients and: (a) receipt of medication information; (b) receipt of conflicting medication information; (c) ambiguity aversion; (d) medication-related discussions with doctors and spouse/partners; and (e) medicat...

We study an investor’s decision to switch from active portfolio management to passive management. This problem is mathematically modelled by a mixture of a consumption-portfolio selection problem and an optimal stopping problem. We assume that the investor has stochastic differential utility with ambiguity aversion and incurs utility loss from active portfolio management that can be avoided by ...

Experimental results on the Ellsberg paradox typically reveal behavior that is commonly interpreted as ambiguity aversion. The experiments reported in the current paper find the objective probabilities for drawing a red ball that make subjects indifferent between various risky and uncertain Ellsberg bets. They allow us to examine the predictive power of alternative principles of choice under un...

This paper develops a simple model of public bads where players have heterogeneous beliefs about the consequence of their collective action. Properties of equilibrium and its relation to beliefs and preference are examined, followed by a detailed investigation of the impacts of new information. Our analysis sheds light on an important trade-off associated with information policies in the presen...

An axiomatic characterization of recursive utility with source-dependent constant relative risk aversion (CRRA), constant elasticity of intertemporal substitution, constant rate of impatience and subjective beliefs is established. The utility form is a minimal extension of Epstein-Zin-Weil utility that allows the CRRA to depend on the source of risk, a dependence that admits an ambiguity aversi...